Markets Regulator Sebi on Monday slapped a total fine of over Rs 13 crore on five entities belonging to promoters and persons acting in concert (PAC) of Gujarat Arth Ltd for manipulative trading and violating insider trading provisions.
In an order, the regulator imposed a fine of Rs 2.53 crore each on the five entities—Shiv Kumar Agarwal, Rosydevi Agarwal Madhudevi Agarwal, Roselabs Ltd and Pawankumar Agarwal.
Besides, an additional penalty of Rs 7.73 lakh, 12.38 lakh and 15 lakh was imposed on Shiv Kumar, Roselabs and Pawankumar, respectively.
In 2014, the regulator had levied penalty on the entities which they had challenged in the Securities Appellate Tribunal (SAT).
The tribunal setting aside the Sebi order had directed the regulator to pass a fresh order on merits.
In a fresh order, the regulator said entities had issued misleading corporate announcements in 2003 and 2004, like the acquisition of business of Poonam Industries, preferential issues, among others, which however did not materialise.
The misleading announcements influenced the share price which lured the investors, leading to creation of artificial volume, thereby violating the PFUTP (Prohibition of Fraudulent and Unfair Trading Practices) Regulations.
Further, the entities by transferring and receiving shares in off-market transactions, triggered more than 15 per cent capital of the company.
However, no announcement was made by the entities regarding the transfer of shares under the SAST (Substantial Acquisition of Shares and Takeovers) norms and few among them failed to disclose their change in shareholding to the exchange under PIT (Prohibition of Insider Trading) norms, the regulator noted.
"There is no case for change in the penalty imposed on the Noticees" (five entities) imposed earlier, the Securities and Exchange Board of India (Sebi) said.
